Strategy

FIAX consists of 3 components:

U.S. Treasuries​

Under normal circumstances, the Fund will invest at least 80% of its net assets in U.S. Treasury fixed income securities.​

Options spread across multiple ETFs​

The Fund’s defined risk option premium strategy uses options on ETFs across multiple asset classes (e.g., equities, commodities, fixed income). ​

Directional S&P 500 Exposure​

By creating a directional S&P 500 option position, the Fund can participate in upside movement of the underlying SPY ETF. 

The Nicholas Fixed Income Alternative ETF (FIAX) Fund is an actively managed exchange-traded fund (“ETF”) that seeks to provide income using U.S. Treasury fixed income securities and a “defined risk option premium."

  • The Fund’s defined risk option premium strategy uses options on ETFs across multiple asset classes (e.g., equities, commodities, fixed income).

  • The Fund’s option positions will be comprised of vertical credit spreads and vertical debit spreads that aim to capture a premium representing a combination of dividends and growth of the underlying assets.

  • Through the defined risk option premium strategy, two options transactions are paired together in order to create a “defined risk” trade that caps the maximum possible gains and losses from the outset.

  • Under normal circumstances, the Fund will invest at least 80% of its net assets in U.S. Treasury fixed income securities.

  • The Fund’s assets will also be invested in Treasury Bills, cash and cash equivalents to act as collateral for any margin requirements. Due to the nature of the Fund’s options strategy, the Fund’s Treasury Bills, cash and cash equivalent holdings may comprise 90% or more of the Fund’s net assets.

  • The Fund will limit the use of leverage by ensuring that the aggregate notional value of the underlying ETFs or indexes (as measured by the strike price of the options) of the put options sold will not exceed the Fund’s total net assets.